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Poker News | Gambling and the Law

Internet Gambling Regulation Bill Passes House Committee

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The path of a bill moving through Congress is typically a tough, long one, and that of the Internet Gambling Regulation, Consumer Protection and Enforcement Act has been no different. The journey began with Rep. Barney Frank’s introduction of the legislation in May of 2009, and more than a year later, it finally passed the Financial Services Committee, though a lengthy battle still waits in order to get the bill to the floor of the House of Representatives for an actual vote.

The July 21st hearing in the Committee brought H.R. 2267 up for discussion, and a number of Representatives made their feelings known on both sides of the issue, as did those who testified. Professional poker player Annie Duke spoke for the Poker Players Alliance, Lynn Malerba testified as the Chairwoman of the Mohegan Tribe of Indians in support of the bill but with changes in mind, Ed Williams of the Credit Union National Association spoke of the need for news laws that would erase the ambiguity of the UIGEA, Tom Malkasian represented Commerce Casino in opposition to the new bill, and Michael Fagan discussed the negatives of online gaming. But it was at the end of the hearing that Rep. John Campbell spoke of the need for the bill and let it be known that it was schedule for mark-up the following week.

With that news, the poker community waited for the July 27th mark-up date, though it was ultimately pushed back to Wednesday, July 28 due to lack of time on the original day. The session was a long and convoluted one, as the Financial Services Committee debated a number of amendments proposed for H.R. 2267 before the ultimate Committee vote. Chairman Frank presided over the activities as well and supported the bill, as Ranking Member Rep. Spencer Bachus played a major role in opposition to it. There were 13 amendments introduced in total, and their results varied.

Passed:

--Amendment 1 from Rep. Brad Sherman would prohibit online gaming sites that have allegedly broken the law by accepting U.S. customers since the UIGEA passed from obtaining licenses to do business under the new law.

--Amendment 2 from Rep. Peter King would exclude sports betting from the law but did not include horseracing.

--Amendment 3 from Rep. Mary Jo Kilroy gave the Secretary of the Treasury the ability to prohibit advertising of online gaming to minors and addicts.

--Amendment 7 from Rep. John Campbell provided that licensees be located in the United States, states and tribes have equal authority, customers must be 21 years of age or older, age and residence must be verified before customers can play, gaming odds must be posted, banks can only fund transactions for licensed sites, licensing requirements must be met by sites, and loss limits must be imposed for customers.

--Amendment 8 by Rep. Brad Sherman gave states an opt-out within the first legislative session following passage.

--Amendment 9 by Rep. John Campbell allowed licenses to be revoked for minor-directed advertising.

--Amendment 10 by Rep. Melissa Bean specified that fines and revoked licenses will be imposed if minors are discovered on sites.

--Amendment 11 from Rep. Barney Frank was also known as the “Manager’s Amendment” and included several provisions, including bettors being restricted from using credit cards, bettors being allowed to use prepaid and debit cards, and the Committee lacking jurisdiction on tribal rights.

--Amendment 12 from Rep. Michele Bachmann outlawed anyone delinquent on child support payment from being allowed to play on any site.

--Amendment 13 from Rep. Gary Peters gave intrastate state and tribal lotteries exemption from licensing requirements.

Failed:

--Amendment 4 from Rep. Spencer Bachus and Michele Bachmann not only prohibited offshore sites that have allegedly done business illegally in the U.S. from obtaining a license, but anyone who had been employed by those sites and anyone associated with those sites, all of whom would be banned. This was defeated by a roll call vote of 43 - 22.

--Amendment 5 from Rep. Joe Baca allowed Indian tribes to participate in the business, but Frank denied the amendment due to irrelevance.

--Amendment 6 from Rep. Joe Baca allowed states and tribes to opt-in to the gaming business, and it was denied by a voice vote as well as defeated by a roll call vote of 37 - 22.

When the amendment process concluded, the whole of H.R. 2267 was up for a vote, and it passed by a solid and bi-partisan margin of 41 yeas to 22 nays. This means that the bill can proceed to the floor of the House of Representatives for discussion and a possible vote, though there is no time frame being given for when this could take place. A positive vote in the House would send it to the Senate for a majority vote, and passage there would give it to President Barack Obama to sign into law.

The poker community was quick to react to the forward movement of online gaming regulation. The Poker Players Alliance released a statement applauding the passage of the bill out of Committee. PPA Chairman and former U.S. Senator’s statement read, in part: “This is a great day not only for poker players, but for proponents of internet freedom and individual liberty. We thank Chairman Frank for his leadership on this bill, and look forward to working with him to bring this bill through the legislative process.”

PPA Executive Director John Pappas added, “We commend the lawmakers who helped make H.R. 2267 stronger through a variety of consumer protection mandates. In particular, we thank Representatives John Campbell (R-CA), Mary Jo Kilroy (D-OH), and Melissa Bean (D-IL) for their thoughtful additions to the bill and their interest in preserving the rights of adult poker players in their districts.”

The Safe and Secure Internet Gambling Initiative also weighed in after their own lobbying efforts were successful thus far. Spokesperson Michael Waxman said, “The Committee’s bi-partisan vote to approve Chairman Frank’s legislation is nothing short of historic. With Congress bitterly divided and only a handful of bi-partisan bills coming out of the Financial Services Committee, we’re pleased Committee members from both sides of the aisle were able to come together to advance this important legislation.

Even PokerStars weighed in on the passage of H.R. 2267, noting in its press release that the bill “offers a long overdue common sense approach to internet gaming regulation in the United States. PokerStars wholeheartedly supports the efforts of Chairman Frank and the bill’s proponents.” The statement made it clear that allegations of sites illegally operating in the United States under current law and threats to prohibit them from obtaining licenses under new legislation would not apply to them, stating that “neither would adversely affect the availability of a license for a respected operator such as PokerStars.” as “its activities in the US are and at all times have been lawful.”

PokerStars General Counsel Paul Telford stated, “PokerStars maintains its strong support for H.R. 2267 and encourages the full House and ultimately the Senate to move quickly to secure passage during the current Congressional term. PokerStars, a pioneer in operating online poker under stringent regulatory frameworks, looks forward to working with incumbent and new operators in promoting a safe and healthy online poker industry in the United States, as it currently does under similar licensing models in Italy and France.”

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